Deck 12: UCC Sales Contracts, Leases, and Warranties

Question 1

A ________ is defined as the passing of title of goods from a seller to a buyer for a price.

A)lease
B)sale
C)loan
D)gift

Answer 1

B

Question 2

Only movable goods come under the scope of Article 2 of the UCC.

Answer 2

True

Question 3

The ________ is a model act passed in 1949 that includes comprehensive laws that cover most aspects of commercial transactions.

A)Gramm-Leach Bliley Act
B)Sarbanes-Oxley Act
C)Uniform Sales Act
D)Uniform Commercial Code

Answer 3

D

Question 4

Which of the following does Article 2A of the Uniform Commercial Code govern?

A)mixed sales
B)deposits
C)leases
D)letters of credit

Question 5

Article 2A of the UCC deals with lessors and lessees.

Question 6

Article 2 of the Uniform Commercial Code is also applied by federal courts to sales contracts governed by federal law.

Question 7

Which of the following describes a mixed sale?

A)a sale that involves two or more intangible goods
B)a sale that involves the passing of title of goods from a seller to a buyer for a price
C)a sale that involves the possession and use of named goods for a set price
D)a sale that involves the provision of a service and a good in the same transaction

Question 8

Sales that contain provisions of services and goods in the same transaction are not covered by Article 2 of the UCC.

Question 9

Under which of the following transactions does title to goods pass from the seller to the buyer?

A)an option contract
B)a rental agreement
C)a lease agreement
D)a contract for the sale of goods

Question 10

A person who transfers the right of possession and use of goods under a lease is known as the ________.

A)lessor
B)lessee
C)seller
D)consignee

Question 11

What are the provisions for contracts with services under Article 2 of the UCC?

Question 12

Whistle Cabs,a taxi service company,has been ordered by the traffic department to upgrade its taxi meters to digital ones.Whistle Cabs contemplates a sales contract with Running Electricals,a company that manufactures digital taxi meters.Due to short notice from the city and a lack of funding,however,Whistle Cabs instead approaches Goldmint Bank,which purchases the digital taxi meters from Running Electricals and delivers them to Whistle Cabs.The contract between Whistle Cabs and Goldmint Bank allows the taxi service company to use the taxi meters for a set period of time by providing monthly rentals.What is the nature of the contract made between Whistle Cabs and Goldmint Bank?

A)a counteroffer
B)a lease
C)a sale of goods
D)an option contract

Question 13

A ________ is a transfer of the right to the possession and use of named goods for a set term in return for certain consideration.

A)trade
B)gift
C)lease
D)sale

Question 14

Which of the following articles in the UCC deals with the sale of goods?

A)Article 2
B)Article 4
C)Article 5
D)Article 8

Question 15

The ________ refers to a model act that includes comprehensive laws that cover most aspects of commercial transactions.

Question 16

Contracts for the provision of services are not covered by Article 2 of the UCC.

Question 17

Article 2 of the UCC applies to sales contracts for the sale of intangible goods.

Question 18

Which of the following sales is covered by Article 2 of the UCC?

A)the sale of intangible goods
B)the sale of tangible goods
C)the sale of real estate
D)the sale of stocks

Question 19

Article 2 of the UCC governs ________.

Question 20

If a person buys a computer,the sales contract for it would be subject to Article 2 of the UCC.

Question 21

Which of the following is an accurate statement regarding the risk of loss in a shipment contract after the seller delivers conforming goods to the carrier?

A)The seller bears the risk of loss during transportation.
B)The buyer bears the risk of loss during transportation.
C)The seller and the buyer equally bear the risk of loss during transportation.
D)The seller bears one-third of the risk of loss and the buyer bears two-thirds of the risk of loss during transportation.

Question 22

Steve brings his watch to Knell Watches,a store that sells and repairs watches,to be repaired.The watch store repairs the watch and then sells it to Kevin,who buys the watch with a fraudulent check that bounces.Kevin then resells the watch to his friend Jonathan,who is unaware of the stolen status of the watch.Who can legally claim ownership over the watch in court?

A)Jonathan
B)Steve
C)Knell Watches
D)Kevin

Question 23

According to the mirror image rule,which of the following is true of additional terms being added in an acceptance?

A)They are considered to be counteroffers.
B)They can be added when the sale is between a merchant and a non-merchant.
C)They can be added to the contract without the consent of the offeror.
D)They are considered to constitute acceptance.

Question 24

Who among the following is a good faith purchaser?

A)a person who buys goods from a person with a voidable title
B)a person who buys stolen goods without being aware of it
C)a buyer who agrees to hold goods for a person until the delivery of the goods is made
D)a buyer to whom goods are delivered by a seller to sell on the seller's behalf

Question 25

Under the UCC,if the time,place,and manner of delivery of goods are not mentioned in a contract,________.

A)the place of delivery is the buyer's place of business
B)the contract is void for lack of definiteness
C)the place of delivery is the seller's place of business
D)the seller is obligated to pay for shipping to the buyer's place of business

Question 26

In which of the following cases does a seller have the right to stop delivery of goods in transit,regardless of the size of the shipment?

A)if the buyer repudiates the contract
B)if the buyer has payments due
C)if the seller learns of the buyer's insolvency
D)if the seller has been ordered for specific performance

Question 27

Larry,a merchant seller,had contracted with Simon to buy welding equipment.The contract stipulated that Larry would pick up the equipment from Simon's warehouse on the 14ᵗʰ day from the date of the contract.Larry could not make the pick-up on the stipulated date and before he could do so on the 15ᵗʰ day,the warehouse and its contents were destroyed by arsonists.In this situation,who bears the risk of loss for the goods that were to be received by Larry?

A)The risk of loss lies with Larry for delaying the pick-up.
B)The risk of loss lies with Simon for not protecting the goods from the arsonists.
C)The risk of loss is equally shared by Larry and Simon.
D)The risk of loss is shifted to the persons responsible for the fire.

Question 28

Klint Microsystems,a microprocessor manufacturer,was contracted by Zeitar Studios to manufacture specially designed microchips to be used in an audio engineering process.Zeitar was to pay Klint $300,000 as per the contract.Klint decided to redesign its existing microchips and make them suitable for Zeitar.While the finished microchips were being shipped via a carrier,Klint was informed of Zeitar's insolvency.Klint cancelled the shipment before it was delivered.Klint then resold the chips to another studio where it had to settle for $150,000,as the chips were now suitable for specific audio engineering processes only.What remedy did Klint exercise when it stopped shipment to Zeitar?

A)remedy to dispose of goods
B)remedy to stop goods in transit
C)remedy to obtain specific performance
D)remedy to recover purchase rent

Question 29

A contract is created when ________.

A)the acceptance has been received by the offeror
B)an acknowledgement is sent by the offeror to the offeree of receiving an acceptance
C)the offeree mails the acceptance
D)a written acceptance has been passed between the offeror and the offeree

Question 30

The UCC rule that says that a merchant who offers to buy,sell,or lease goods and gives a written and signed assurance on a separate form that the offer will be held open cannot revoke the offer for the time stated or,if no time is stated,for a reasonable time is referred to as the ________.

A)gap-filling rule
B)firm offer rule
C)mirror-image rule
D)open term rule

Question 31

Article ________ of the UCC governs leases of goods.

Question 32

In a lease contract,the title of goods is passed from the lessor to the lessee.

Question 33

A title for goods obtained by a seller through fraud,impersonation,or a dishonored check is referred to as a(n)________.

A)unenforceable title
B)voidable title
C)conditional title
D)unequivocal title

Question 34

In which of the following contracts is the term "no-arrival,no-sale" found?

A)a shipment contract
B)a destination contract
C)a contract to sell real estate
D)a consignment contract

Question 35

A transfer of the right to the possession and use of named goods for a set term in return for certain consideration is known as ________.

Question 36

Kimberley,a merchant seller in Kansas,had an oral contract to sell goods to Jane,a merchant buyer in Memphis,for $100,000.Two days after contracting,Kimberley sends a sufficient written confirmation to Jane of the agreed-upon transaction.Jane,who has reason to know the contents of the written confirmation,fails to immediately object to the contents of the confirmation.Two weeks after receiving the written confirmation,Jane receives delivery of the goods from Kimberley,and Jane then sends an objection to the written confirmation to Kimberley.Which of the following is true of the contract between Kimberley and Jane?

A)The Statute of Frauds can be raised against the contract because a letter of objection was sent to the offeror.
B)The offer is valid as the offeree knew the contents of the confirmation and did not object within 10 days.
C)The contract is void as the offeror did not receive a letter of confirmation from the offeree for delivery.
D)The Statute of Frauds can be raised because the offeree did not sign the contract.

Question 37

Blue Rorschach Inc.has an immediate requirement for 80 laptops and contracts with Zenzo Electronics for 80 OSN laptops at $550 each.But Zenzo Electronics breaches the contract and fails to deliver the laptops.Blue Rorschach then immediately contracts Dell Computers,buys 100 laptops at $600 per laptop,and then sues Zenzo Electronics for the breach of contract.What remedy did Blue Rorschach exercise when contracting Dell Computers and suing Zenzo for failure of delivery of goods?

A)remedy to replevy goods
B)remedy to cover
C)remedy to recover damages for accepted nonconforming goods
D)remedy to obtain specific performance

Question 38

Pollard enters into a sales contract to purchase a specific Picasso painting from Jenson for $15 million.When Pollard tenders payment,Jenson refuses to sell the painting.Which of the following remedy can Pollard exercise to retrieve the painting from Jenson?

A)remedy to cover
B)remedy to recover damages for nondelivery
C)remedy to obtain specific performance
D)remedy to cancel the contract

Question 39

The ________ requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing.

A)parol evidence rule
B)open price term
C)firm offer rule
D)Statute of Frauds

Question 40

Which of the following is an accurate statement regarding the risk of loss in a destination contract after the seller delivers conforming goods to the carrier?

A)The seller bears the risk of loss during transportation.
B)The buyer bears the risk of loss during transportation.
C)The seller and the buyer equally bear the risk of loss during transportation.
D)The buyer bears one-third of the risk of loss and the seller bears two-thirds of the risk of loss during transportation.

Question 41

If the parties to a sales contract do not agree to the time,place,and manner of delivery of the goods,the place for delivery is ________.

Question 42

________ are damages that will be paid upon a breach of contract that are established in advance.

Question 43

The ________ rule permits certain open terms to be "read into" a sales or lease contract.

Question 44

According to the Statute of Frauds,all contracts for the sale of goods costing $500 or more must be in writing.

Question 45

The firm offer rule allows the offeror to revoke an offer at any point of time prior to the acceptance.

Question 46

If the parties to a sales contract do not agree to the time,place,and manner of delivery of the goods,the place for delivery is the seller's place of business.

Question 47

A person with voidable title to goods can transfer title to a good faith purchaser for value.

Question 48

In a case in which a buyer purchases goods from a thief who has stolen them,the purchaser does not acquire title to the goods.

Question 49

What is the passage of title to goods?

Question 50

How does the UCC treat goods that were fraudulently obtained?

Question 51

A warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality,description,performance,or condition is known as a(n)________ warranty.

A)implied
B)conditional
C)closed
D)express

Question 52

A seller or lessor has ________ if he obtained the goods through fraud,if his check for the payment of the goods or lease is dishonored,or if he impersonated another person.

Question 53

The term ________ refers to a situation in which a thief acquires no title to goods he or she steals.

Question 54

In a destination contract,the ________ bears the risk of loss of the goods during their transportation.

Question 55

An e-contract is made when the offeree sends an e-mail or another electronic document to the offeror.

Question 56

The right to withhold delivery is available to the seller if the buyer or lessee wrongfully rejects or revokes acceptance of the goods.

Question 57

A sales or lease contract is only created when the offeror receives the offeree's acceptance.

Question 58

A ________ is a seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.

A)bond
B)caveat emptor
C)warranty
D)collateral

Question 59

Unless otherwise unambiguously indicated by language or circumstance,an offer to make a sales or lease contract may be accepted in any manner and by any reasonable medium of acceptance.

Question 60

In a destination contract,the seller is required to replace any goods lost in transit.

Question 61

The doctrine of ________ governed the law of sales and leases for centuries before the UCC was adopted.

Question 62

If the "as is" type of disclaimer is not used,a disclaimer of the implied warranty of merchantability must specifically mention the term merchantability for the implied warranty of merchantability to be disclaimed.

Question 63

A seller's or lessor's statement of opinion or commendation of the goods does not create an express warranty.

Question 64

The ________ is a federal statute that regulates written warranties on consumer products.

Question 65

What is the difference between a full warranty and a limited warranty?

Question 66

Unless properly disclosed,a warranty that is implied that sold or leased goods are fit for the ordinary purpose for which they are sold or leased,as well as other assurances,is known as ________.

A)implied volatility
B)an implied cause of action
C)an implied assertion
D)the implied warranty of merchantability

Question 67

The implied warranty of fitness for a particular purpose applies only to merchants.

Question 68

Which of the following constitutes an implied warranty?

A)affirmation of the facts of the goods
B)description of the goods
C)model or sample of the goods
D)adequate packaging and labeling of the goods

Question 69

The implied warranty of merchantability requires that the quality of the goods must pass without objection in the trade.

Question 70

A(n)________ is a warranty created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality,description,performance,or condition.

Question 71

A statement that negates express and implied warranties is known as a ________.

Question 72

Which of the following would constitute the creation of an express warranty for goods?

A)a description of the goods
B)a commendation of the goods
C)prior experience with the goods
D)affirmation of the value of the goods

Question 73

What type of transactions are covered under the Magnuson-Moss Warranty Act?

A)consumer transactions
B)commercial transactions
C)industrial transactions
D)governmental transactions

Question 74

Which of the following is true of an "as is" disclaimer?

A)It disclaims all implied warranties.
B)It disclaims all express warranties.
C)It is a type of implied warranty.
D)It cannot be replaced by another warranty.

Question 75

Sam expressed interest in buying a painting from Jasper,whose asking price was $15,000.Sam was only willing to offer $13,000.Jasper told him that it was a very old painting worth a fortune and that others would gladly pay $20,000 for it.Sam decided to buy the painting for $15,000 on the condition that if he found that the painting was worth less than $15,000,Jasper would have to take the painting back and refund Sam.Which of the following warranties did this sales contract have?

A)an implied warranty of merchantability
B)an express warranty
C)a statement of opinion
D)an implied warranty of fitness

Question 76

A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part,without review or action by an individual,is known as a(n)________.

A)electronic agent
B)electronic record
C)firewall
D)operating system

Question 77

Implied warranties of quality cannot be disclaimed.

Question 78

Give an account of express warranties.

Question 79

A(n)________ refers to a warranty that arises where a seller or lessor warrants that the goods will meet the buyer's or lessee's expressed needs.

Question 80

Only written express warranties are valid.